Unilever has rejected Kraft Heinz $143bn offer to takeover the beverage giant.
Kraft Heinz Co. made a $143bn offer for Unilever in what would be the largest-ever takeover in the food or beverage industry, opening a campaign to create a consumer-goods giant with household names from Dove soap to Heinz ketchup.
Unilever said on Thursday it rejected the $50 a share proposal, comprising about two-thirds in cash and a third in new stock. The approach “fundamentally undervalues” the company, Unilever said, adding that it doesn’t see a basis for further discussions. Kraft Heinz said earlier it would seek to gain an agreement on the terms of a transaction.
Unilever shares surged as much as 15 percent to a record in London, valuing the maker of Hellmann’s mayonnaise at more than £113bn ($140bn). The Anglo-Dutch company’s stock gained as much as 12 percent in Amsterdam, while Kraft Heinz rallied more than 7 percent in New York.
The bid underscores consolidation among consumer-goods companies searching for profit-growth strategies as conditions become tougher across the globe. Kraft Heinz itself was forged in a $55bn combination orchestrated by Warren Buffett’s Berkshire Hathaway Inc. and Brazilian investment firm 3G Capital, which had teamed up two years earlier on a buyout of H.J. Heinz.